The unamended House version of the Cash for Clunkers program easily made it through the Senate by a 60-37 vote, and has already been signed into law by President Obama. Estimates are that the $2B infusion will keep it alive through Labor Day.
Democratic senators supplied the lion’s share of votes to pass the measure, but four of them joined with the majority of Republicans and voted against the bill. But the seven Republicans who crossed the aisle and voted with the majority of Democratics more than made up for the defections.
The bill quickly received an autograph from Obama, who said, “”Now more American consumers will have the chance to purchase newer, more fuel-efficient cars and the American economy will continue to get a much-needed boost.”
The bill has been praised by broadcast executives who have had occasion to comment on it during the current round of quarterly conference calls. And auto manufacturers and dealers were also happy about the new round of funding.
Michael J. Stanton, President and CEO of the Association of International Automobile Manufacturers, said, “Consumer response to the CARS program has been extremely encouraging and we hope these increased sales will provide the jump-start necessary to re-energize the auto industry in the United States and increase the overall fuel economy of the domestic fleet.”
His sentiments were echoed by John McEleney of the National Automobile Dealers Association, who added, “Cash for clunkers is a resounding success. With the additional $2B, even more ‘clunkers’ will be taken off the road and replaced with more fuel-efficient vehicles. Extending the ‘clunkers’ program benefits the environment and the economy. It’s the best kind of stimulus.”
At least one business owner planned to take unique advantage of the program – and encouraging this kind of a vehicle buyer is a tip you may wish to share with your dealer clients. The J.F. Kiely Construction Co. is planning to take advantage of Clunkers to update its own fleet of vehicles. “Through this program, we have been able to remove vehicles from service and replace them with new vehicles that have far-greater fuel economy,” said company President John M. Kiely.
RBR/TVBR observation: We’d like to see more stimulus like Clunkers that encourages instant spending. Getting citizens and businesses engaging in commerce is a key to floating all boats.
Some in Congress have objected to this program because they don’t want the government to get into the used car business. But the government isn’t – it’s simply injecting a certain amount of cash into an ailing economy – cash already approved for stimulus use – and it’s bringing buyers who otherwise would have remained on the sidelines back into the market.
Each government investment of $4.5K will result in much more actual spending. And once all that cash starts changing hands, it will start filtering through the entire economy. And if Clunkers is able to save jobs, the bang for the buck is doubled – every citizen it helps keep on a payroll is one more citizen adding to the GNP rather than subtracting from the unemployment insurance pool.
We’d still like to see serious consideration given to a consumer tax rebate in the form of a $2K gift card. The consumer will not be able to put it in a savings account or use it to pay down a mortgage. It’ll go straight into the economy – to retail outlets, restaurants, airlines – saving jobs, maybe even encouraging hires, fueling businesses, and encouraging those businesses to advertise.